For example, there is an often cited " 80-20 rule "-also known as the " Pareto principle " or the " Law of the Vital Few "-whereby 80 % of crimes are committed by 20 % of criminals, or 80 % of useful research results are produced by 20 % of the academics, and so forth.

Pareto Optimality, External Costs, and Income Redistribution

* " Wealth Condensation in Pareto Macroeconomies ", Z. Burda, D. Johnston, J. Jurkiewicz, M. Kamiński, M. A.

* " Pareto Index Estimation Under Moderate Right Censoring ", Jan Beirlant, Armelle Guillou, Scandinavian Actuarial Journal, volume 2 ( 2001 ), pages 111 – 125.

* " Pareto Index Induced from the Scale of Companies ", Atushi Ishikawa, Physica A, volume 363, pages 367 – 376, 2006.

* " Generalized Pareto Fit to the Society of Actuaries Large Claims Database ", A. Cebrián, M. Denuit and Ph.

Another route undertaken was initiated by Émile Durkheim, studying " social facts ", and Vilfredo Pareto, opening metatheoretical ideas and individual theories.

The theory of indifference curves was developed by Francis Ysidro Edgeworth, who explained in his book " Mathematical Psychics: an Essay on the Application of Mathematics to the Moral Sciences ”, 1881, the mathematics needed for its drawing ; later on, Vilfredo Pareto was the first author to actually draw these curves, in his book " Manual of Political Economy ", 1906 ; and others in the first part of the 20th century.

This analysis follows the lead of the neoclassical school, and relies on the notion of Pareto efficiency – and specifically considers market failures absent considerations of the " public interest ", or equity, citing definitional concerns.

Colloquial uses of the term " market failure " reflect the notion of a market " failing " to provide some desired attribute different from efficiency – for instance, high levels of inequality can be considered a " market failure ", yet are not Pareto inefficient, and so would not be considered a market failure by mainstream

Edgeworth's original two-axis depiction was developed into the now familiar box diagram by Pareto in his book " Manual of Political Economy ", 1906 and was popularized in a later exposition by Bowley.

The liberal paradox is a logical paradox advanced by Amartya Sen, building on the work of Kenneth Arrow and his impossibility theorem, which showed that within a system of menu-independent social choice, it is impossible to have both a commitment to " Minimal Liberty ", which was defined as the ability to order tuples of choices, and Pareto optimality.

In a 2006 working paper titled " Goodbye Pareto Principle, Hello Long Tail ", Erik Brynjolfsson, Yu ( Jeffrey ) Hu, and Duncan Simester found that, by greatly lowering search costs, information technology in general and Internet markets in particular could substantially increase the collective share of hard-to-find products, thereby creating a longer tail in the distribution of sales.

A widely-accepted general standard is Pareto efficiency, which is reached when no further change can make someone better off without making someone else worse off.

Being on the curve might still not fully satisfy allocative efficiency ( also called Pareto efficiency ) if it does not produce a mix of goods that consumers prefer over other points.

This result is described as market efficiency, or more specifically a Pareto optimum.

They came to the conclusion that, under idealized conditions, free markets lead to a Pareto distribution of wealth.

* 1848 – Vilfredo Pareto, Italian economist and sociologist ( d. 1923 )

: This model has been used in general equilibrium theory, particularly to show existence and Pareto efficiency of economic equilibria.

Anglo-American economists also responded to these problems by turning towards general equilibrium theory, developed on the European continent by Walras and Vilfredo Pareto.

These developments are reflected in neoclassical theory by the search for the occurrence in markets of the equilibrium conditions of Pareto optimality and self-sustainability.

In this view, it does not focus on explaining actual economies, but instead on describing a " utopia " in which Pareto optimality applies.

Prolific authors on the subject of oligarchy include Vilfredo Pareto, Gaetano Mosca, Thomas R. Dye, Robert Michels, Plato, Webster Tarpley, and Ioannes Zwetsch.

In economics the Pareto index, named after the Italian economist and sociologist Vilfredo Pareto, is a measure of the breadth of income or wealth distribution.

It is one of the parameters specifying a Pareto distribution and embodies the Pareto principle.

As applied to income, the Pareto principle is sometimes stated in popular expositions by saying 20 % of the population has 80 % of the income.

The Pareto index is the parameter α.

The larger the Pareto index, the smaller the proportion of very high-income people.

Economists therefore sometimes state that the Pareto law as stated here applies only to the upper tail of the distribution.

* Vilfredo Pareto, Cours d ' économie politique professé à l ' université de Lausanne, 3 volumes, 1896 – 7.

Pareto interpolation can be used when the available information includes the proportion of the sample that falls below each of two specified numbers a < b. For example, it may be observed that 45 % of individuals in the sample have incomes below a

One of the simplest characterizations of the Pareto distribution, when used to model the distribution of incomes, says that the proportion of the population whose income exceeds any positive number x > x < sub > m </ sub > is

It is possible that men exaggerated their reported number of partners, women reported a number lower than the actual number, or a minority of women had a sufficiently larger number than most other women to create a mean significantly higher than the median, or all of the above ( see Pareto principle ).

* a positive number κ that is the smallest value that a random variable with a Pareto distribution can take.

* a positive number θ the " Pareto index "; as this increases, the tail of the distribution gets thinner.

In studies of the networks of citations between scientific papers, Derek de Solla Price showed in 1965 that the number of links to papers — i. e., the number of citations they receive — had a heavy-tailed distribution following a Pareto distribution or power law, and thus that the citation network is scale-free.

This is why the above cases ( e. g. binomial with varying number of trials, Pareto with varying minimum bound ) are not exponential families — in all of the cases, the parameter in question affects the support ( particularly, changing the minimum or maximum possible value ).

Subsequent to his death, Niekisch was one of a number of writers, including the likes of Oswald Spengler, Arthur Moeller van den Bruck, Vilfredo Pareto and Carl Schmitt, whose works were promulgated by the likes of the Groupement de recherche et d ' études pour la civilisation européenne and others involved in the Conservative Revolutionary movement.

Pareto analysis is a statistical technique in decision making that is used for selection of a limited number of tasks that produce significant overall effect.

Because there are an infinite number of agents in the economy, the total value of resources is infinite, so Pareto improvements can be made by transferring resources from each young generation to the current old generation.

* 1986 – Paula Pareto, Argentine judoka

To the right is the long tail, and to the left are the few that dominate ( also known as the Pareto principle | 80 – 20 rule ).

The Pareto principle ( also known as the 80 – 20 rule, the law of the vital few, and the principle of factor sparsity ) states that, for many events, roughly 80 % of the effects come from 20 % of the causes .< ref name =" NYT ">.

* July 15 – Vilfredo Pareto, Italian economist ( d. 1923 )

The term is named after Vilfredo Pareto ( 1848 – 1923 ), an Italian economist who used the concept in his studies of economic efficiency and income distribution.

In the absence of perfect information or complete markets, outcomes will generically be Pareto inefficient, per the Greenwald – Stiglitz theorem.

* Vilfredo Pareto ( 1848 – 1923 ), Italian sociologist, economist and philosopher

Pareto improvements are a small subset of Kaldor – Hicks improvements.

Kaldor – Hicks efficiency, named for Nicholas Kaldor and John Hicks, also known as Kaldor – Hicks criterion, is a measure of economic efficiency that captures some of the intuitive appeal of Pareto efficiency, but has less stringent criteria and is hence applicable to more circumstances.

Under Kaldor – Hicks efficiency, an outcome is considered more efficient if a Pareto optimal outcome can be reached by arranging sufficient compensation from those that are made better off to those that are made worse off so that all would end up no worse off than before.

Using Kaldor – Hicks efficiency, an outcome is more efficient if those that are made better off could in theory compensate those that are made worse off, so that a Pareto improving outcome results.

While every Pareto improvement is a Kaldor – Hicks improvement, most Kaldor – Hicks improvements are not Pareto improvements.

This is because, as the graph above illustrates, the set of Pareto improvements is a proper subset of Kaldor – Hicks improvement, which also reflects the greater flexibility and applicability of the Kaldor – Hicks criteria relative to the Pareto criteria.